Missed the playoffs! Calculate the economic account for the "Lakers" who have lost a lot of money

From July 30, 2021 to April 6, 2022, a full 250 days, Lakers superstars and Lakers fans, had a dream.

The playoffs have always been a must for NBA teams. So, missing the playoffs, what does it mean for a super giant like the Lakers? What does that mean for other small and mid-cap teams that also missed the playoffs?

Text / Xue Yinbo, Fu Haonan

Editor / Liu Jintao, Yin Haonan

On July 30, 2021, the Lakers and the Wizards reached an agreement: the Wizards sent wester, 2024 and 2028 second-round picks in exchange for Kuzma, Pop, Harrell and the 22nd pick of the day's draft. Westbrook, along with James and Anthony Davis, formed the "Big Three". Coupled with the addition of "melon" Anthony and other powerful veterans, the pre-season championship odds opened at the beginning of the season, the Lakers and the Nets' championship odds rank in the top two in the league.

On April 6, 2022, the Lakers lost 110-121 to the Suns on the road, officially missing the playoffs this season.

For 250 days, Lakers superstars and Lakers fans had a dream.

Since the league first introduced preseason championship odds in the 1984-1985 season, the two most promising championship teams of each season (the Lakers and nets this season) have never missed the playoffs, and the Lakers (the second-best odds of winning before the start of the season) are the first teams to miss the playoffs.

The "brothers and sisters" Nets are not having a good time, they are currently in the eighth place in the East, need to enter the playoffs through the playoffs, and still have the embarrassing situation of missing the playoffs.

01

Missing one of the playoff losses: huge prize money

The NBA playoffs have always been a stage for stars to prove themselves.

In the playoffs, the intensity of the game increases dramatically, and whether it is offensive or defensive, players will devote two hundred percent of their energy to the game. Both sides will fight until the bayonet is red, every rebound, every score, and even every foul may affect the trend of the entire series, under such strong pressure, it is a huge test for the player's body and psychology.

James' ultimate solo performance in the 2018 playoffs

However, not every team can have a very dominant star like James. In the NBA every season, there are only one or two teams that can have absolute championship strength, and most teams, especially those from small and medium-sized cities, are not in the real championship group.

However, small market teams can still grab playoff seats through management, operation and other means, earn the "dividend" of playoff participation, and lay the foundation for the long-term development of the team.

Beginning in 1982, the NBA League established a playoff prize pool, the specific amount of which was set according to the provisions of the collective bargaining agreement. The team's participation in the playoffs not only means that the team has become a "city light", but more realistically, it can sell more and more expensive playoff tickets through high-level NBA playoff games, as well as high TV distributions.

When the playoff prize money was first set, it totaled only $1.5 million. In recent seasons, it has risen to $15 million. Judging from the overall operating state of the NBA, the prize pool this season is only high and low compared to previous years. The distribution of bonuses has also undergone discussion and modification by experts, and a fixed system has been formed. The prize money is distributed proportionally to all teams participating in the playoffs and is split in two parts.

Part I Prize Money: Ranking bonuses for the team with the best regular season record and the top six teams in the East and West of the regular season;

The second part of the prize money: distributed to the team participating in the first round of the game, the team in the second round of the game, the team in the East and West finals, the winner of the finals and the loser of the finals of different amounts of bonuses, called round bonuses, how many rounds of playoffs to get the bonus;

The bonus for each item can be accumulated. For example, the total number of prize money for the two teams that finally reached the finals = the prize money for the divisional ranking + the prize money for the first round + the prize money for the second round + the prize money for the division final + the prize money for the finals (the prize money for losing or winning is different)

2012-2013 NBA Playoffs Prize Pool Allocation Program

That is, the team that wins the championship each season can share nearly 30% of it. And the farther the team goes in the playoffs, the higher the prize money.

However, when encountering force majeure factors, the NBA league's own losses are also very large. In 2020, when the world is plagued by the epidemic, the NBA has entered a brief shutdown. It is reported that if the current season (2019-2020 season) is canceled, then the broadcast revenue of the team's local TV station will also be affected, and the NBA is expected to lose up to $900 million in national television broadcast revenue.

Fortunately, the NBA league finally worked out the plan and played the rest of the schedule in Orlando's Disneyland Park, minimizing the loss.

02

Missed the second loss in the playoffs: sky-high box office

Compared with the regular season, the playoffs are the stage for every team and even every city to "fight bayonets".

Every game in the playoffs is a life-and-death battle, and there will be no release of water; every game is broadcast live nationwide, and the ultra-long three-pointer, turnover jump shot, and next-person dunk can all become the headlines of the media.

Mavericks (Mavericks) played against the Heat in 2011

By the time it came to the playoffs, every team seemed to be on the same running line again. No matter how many times the regular season is ranked, the audience now full of people carry the team logo, the small fans jump up and down, the TV stations have broadcast one after another, the major hosts have begun to study the probability of winning the championship, and the whole city is cheering for the team.

For an NBA team, the main way to make money is still from broadcasting and tickets, of which ticket revenue still accounts for the "big head" of the team's revenue.

The NBA's fares fluctuate greatly per game, and you can even grab tickets under $10 for certain games in some small-ball cities, and in turn, the ticket prices are not too cheap when popular teams visit small-ball markets. However, taking the 2017-2018 season as an example, according to this table, we can clearly see that the ticket revenue of NBA teams is always an indispensable part of the total revenue of the team.

The proportion of ticket revenue of each team in the NBA in the 2017-2018 season

Among them, the teams with a high proportion of ticket revenue are divided into the following situations:

The team itself is in a big market city, and the team's own golden signboard can naturally attract high ticket revenue. For example, the New York Knicks, despite their improving performance in recent years, are still not a favorite team for the championship, but with their location in New York, they can also rank in the top three of the list.

Many fans come to Madison Square Garden Court not just to watch an NBA game, but also to find opportunities to meet stars. That's the advantage of big-market teams, which not only have high broadcast contracts, but also attract a large number of fans to watch the game live, and the team can maintain a very high attendance rate regardless of whether the record is good or not.

The city in which the team is located is general in its own market, but the team is strong. The representative of this situation is the Cleveland Cavaliers. Because of the presence of James, the Cavaliers' home speed loan stadium attendance once reached a terrifying 100%.

Cavaliers home of Speedloans Arena

The second situation, that is, the team is in a good city, and the team is also very strong, and the representative of recent years is the Golden State Warriors. They won three titles in four seasons 15-18, and the "Waterfall Brothers", composed of Stephen Curry, Klay Thompson and Kevin Durant, who joined the team as a free agent, played gorgeously, and fans naturally wanted to buy tickets to watch the game live.

According to statistics, the Warriors' season revenue reached $359 million, of which ticket revenue was as high as $143 million, accounting for 40% of the total revenue - you know, the Golden State Warriors' home Oracle Arena is not as large as madison Square Garden Arena, so the level of ticket revenue is amazing.

The bottom few teams are nothing more than teams that have been poor all year round, often missing the playoffs. Perennial absences from the playoffs have reduced the team's competitiveness. In the long run, the fans do not buy for the team, and it is difficult for the team to continue to develop.

The third situation is that there are potential new stars or first-tier stars in the team, but in a small market team, the income is limited. Its representative is the Minnesota Timberwolves, and the team has Carl Anthony Downs, who is already an All-Star, but the overall revenue of the team and the team's ticket revenue are still low, which is the small market capacity of Minnesota itself.

In short, by analyzing the impact of ticket revenue on the team, it is not difficult to see that if you want to increase the team's income, unless you are in a big city such as New York, Los Angeles, and San Francisco, you can only focus on the team's record, improve the team's strength, and strive to become a regular visitor to the playoffs. In this way, the local fans will maintain their enthusiasm for the team and continue to generate the necessary financial income for the team.

03

Third loss in the playoffs: the surrounding economy

As we mentioned above, the playoffs can bring more attention to the team, so the team's revenue will also be on the same level. Teams like Los Angeles and New York that sit in big markets, while their performance is important to them, but in the golden zone, no matter what the results, their income will not be too bad.

Therefore, the playoff economy is actually more important for "small teams" than for big city teams. They need to play in the playoffs to prove that the city is still "active" and generate more revenue for the team.

In the 2018-2019 season, Kawaii Leonard, who has superstar, led the Toronto Raptors to the NBA Finals for the first time in their history, meeting the Golden State Warriors, who have won three championships in four years. It is reported that the average ticket price of the Toronto Raptors' home stadium, Scotiabank Stadium, has set a new high for the average home ticket price of both sides in the past 9 years, and its average ticket price even exceeds the sum of the second and third places.

The 2011-2019 NBA Finals average ticket price is in the top ten

The same situation also appeared in the Milwaukee Bucks in the 2020-2021 season. According to the WEBSITE OF VISION Milwaukee, the Bucks' 2021 championship journey in the NBA playoffs has brought a total of $57.6 million in economic spending to the local market.

First round (May 22-29 vs Miami Heat) $2.7 million

Second round (June 5-19 vs Brooklyn Nets) $12.8 million

Third round (June 23 – July 3 vs Atlanta Hawks) $14.1 million

Grand Finals (July 6 – July 20 vs Phoenix Suns) $28 million

The influence of the NBA Finals, in addition to driving team revenue, also has a positive impact on the GDP and employment of the city where the team is located. For example, the sixth game of the finals alone created an economic impact of nearly $10 million for Milwaukee, with a hotel accommodation rate of 82% in the city center, with an average price of $240 per day, and local tax revenue exceeding $1.1 million.

At the same time, the impact of the playoffs on the city is not only economic, but also in terms of cultural influence, Milwaukee has also achieved considerable growth. According to media monitoring company Meltwater, the NBA playoffs and finals have created a staggering 331 billion impressions for the Milwaukee Bucks, almost the same as the traffic data accumulated throughout the regular season. Google Trend Data Analysis shows that the popularity of "Milwaukee" as a term has also reached a new high in the past five years.

The impact of the NBA Finals on the TEAM's city GDP

The impact of the NBA Finals on the employment rate of teams in cities

Take the Grizzly Bear as an example. In the first decade of this century, the Grizzlies were largely at a loss. The Grizzlies made only three playoffs in that decade, all of which stopped in the first round. Despite the fact that the team had the young hopeful paulo gasol at the time, it could not change the status quo of the team.

Paul Gasol during the Grizzlies

But the Grizzlies should come for a turnaround in the 2010-2011 season. They finished eighth in the West that season and finished the "Black Eight Miracle" in the series 4-2 against the Spurs in the first leg. With the "twin-tower combination" of Mark Gasol and Zach Randolph, the Grizzlies have greatly improved in the strength of the team.

Although the Grizzlies were still losing money that season, the Grizzlies should have made great strides in terms of revenue since this season. In the 10 years since, the Grizzlies have made seven playoffs, and it's worth mentioning that the Grizzlies are still in second place in the West this season (55-24), and they still have a chance to hit the best record in history. This is a big step forward for a small market team. In terms of revenue, the Grizzlies saw their highest revenue in the 2017-2018 season, with revenue as high as $27 million that season.

The Memphis Grizzlies have seen revenue for nearly 20 years

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This season, the combined salary of the Lakers' "Big Three" is as high as $120 million — you know, the NBA salary cap is $112.4 million.

The super high salary of the Big Three not only means that the Lakers have a salary space of only -48.23 million US dollars this season (which means that the Lakers basically lost the ability to sign superstars in the offseason) But what is more frightening is that the Lakers need to pay a high luxury tax of $45.01 million this season - even the Golden State Warriors, who were praised by fans as "Cosmic Brave" at that time, only paid about 50 million luxury taxes.

Therefore, even if it is sitting on the Los Angeles ball market and missing the playoffs, it is also a heavy loss for the Lakers.

Therefore, if the Lakers want to keep James, who has "oil in the fuel tank" and continue to impact the championship, the importance of this offseason is no less important to the Lakers management than a finals.